Dishing out flawless iron shots, the two-time Asian Tour winner started off with birdies on first four but stumbled on the seventh with a double bogey before bouncing back in style for a 10-under 134 after 36 holes to lead by one shot at halfway mark.
"It's not my home yet but I've been coming here from 2005 and know the course well. You just have to be patient," Khan, eyeing a maiden title at the Royal Calcutta Golf Club, said after round two (67-67).
Bengaluru's Rahil Gangjee, the only golfer to be bogey- free through the first 36 holes, registered a 68 to occupy second place at nine-under-135.
Overnight leader Shubhankar Sharma of Chandigarh dropped to third place after a 70 that moved his total to eight- under-136.
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Reigning PGTI Order of Merit champion, Khan, was lying tied second and one off the lead after round one.
After his rampaging start, Khan's double-bogey on the seventh meant that he could not recover from the rough in his first attempt.
Khan then had a stroke of good luck on the 18th where his approach shot from the rough hit the flag stick and landed two feet from the hole thereby resulting in a tap-in birdie.
"I just told myself in the morning, lets continue doing what I did in round one. It worked out well for me with birdies on the first four holes. One cant expect more than that," he said.
Gangjee's (67-68) consistent putting kept him in the hunt on day two as he went error-free for the second straight day.
"I was jittery at the start since I wasnt hitting it well. But then I putted well and made all my par putts. That was crucial. Ive been working hard on my short-game and that's showing," Gangjee said.
Overnight leader Sharma made pars on the first 10 holes but then picked up the pace with three birdies on the next five holes.
However, Sharma dropped a bogey on the 16th to close the day two behind the leader.
He shared fourth place with Patna's Aman Raj at five- under-139.
The five players bunched in tied sixth at four-under-140 included Kolkata-based rookie Viraj Madappa, Sri Lankan N Thangaraja, Chandigarhs Ajeetesh Sandhu, Khalin Joshi of Bengaluru and Gurgaons Veer Ahlawat.
Shivendra Singh Sisodia's 67 was the day's joint best score along with Rashid's. It placed the Gurgaon professional in tied 16th at one-under-143.
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